Accidents and falling ill are believed to cause around 26% of homeowners, or those buying a property, to miss paying their mortgage, according to new data which highlights the importance of financial protection.
Research from MetLife has found that 34% of respondents have had to take four weeks or more off work due to accidents or illness. As a result of this, 47% said they needed financial support to help them meet their mortgage repayments.
61% took four weeks or more off work to care for themselves, while 19% cared for their partner and the same number (19%) to care for a family member. 17% took time off to care for their child(ren).
The research also found that 47% of respondents, with a mortgage, currently have no mortgage financial protection in place - a policy that covers mortgage repayments in the event of the policyholder being unable to work due to illness or an accident. This comes as 43% say they are concerned about making their monthly mortgage repayments. Having no financial support in place can cause added strain at a time when individuals need to spend time caring for themselves or their loved ones.
14% admitted to regretting not having any mortgage protection in place. But worryingly, 40% of respondents do not have savings to fall back on should they need to cover mortgage payments if they were unable to work due to accident or illness.
Rich Horner, Head of Individual Protection at MetLife, comments: “Despite a challenging economic outlook, 2020 saw many people turn their dream of homeownership into a reality. The stamp duty holiday extension announced in the budget, coupled with the "government guarantee" on mortgages, means the number of homeowners is set to rise even higher. But, as ‘Generation Rent’ becomes ‘Generation Buy’, there is an increased need for financial protection and advisers have an invaluable role to play in providing impartial advice and identifying protection gaps.
“Most of us don’t want to think about falling ill or having an accident, but the reality is it can happen to anyone. Some may think they’ll never need it, but ultimately not having something in place – be it a protection policy or savings – to fall back on, can add to what is already a stressful time should you fall ill or have an accident leaving you unable to work. And at a time when individuals need to recuperate, this worry, and stress could add to the healing time.
“Our research found that more than half of homeowners, and those buying a home, claimed to have mortgage protection in place, a much higher figure than the industry average. This raises an interesting question around what constitutes mortgage protection and suggests more needs to be done to enhance understanding and awareness of what financial protection is available, and what is best suited to meet their needs. And as providers, we have all have a role to play in that.”